ECN or market maker? The label tells less than the behavior

[Shadow Trader]

The labels are slippery. A broker describing itself as ECN may route to a handful of liquidity providers and keep a margin on the side. A broker described as a market maker may pass much of the flow through anyway and only warehouse the flow it likes.

Behavior is what separates them. A few things to compare:

Price source: a true multi-provider feed shows tiny, constant fluctuations in the spread and occasional negative spreads on the aggregated book. A single-source feed looks smoother and rounder.

Fill behavior: genuine pass-through tends to give slippage in both directions. A dealing desk that internalizes tends to fill at the requested price on small orders and reject or delay the rest.

Response to scalping: some desks tolerate it until profits become persistent, and then change the terms. Others stay indifferent.

Spread under stress: ECN-type pricing widens fast on news. Dealer pricing sometimes stays artificially tight, then stops filling.

None of this is automatically good or bad. A market maker with fast fills and tight spreads beats an ECN with delays. The point is to judge by measured results.

What tests have been used to tell which type of execution an account really has?